By Barbara Kollmeyer and Anora Mahmudova, MarketWatch

Airline shares hit amid flight cancellation due to East Coast blizzard

U.S. stocks traded modestly lower on Tuesday as a persistent slump in oil prices put pressure on energy shares. Investors were also making guarded moves ahead of the start of the two-day Federal Open Market Committee meeting.

Meanwhile, a blizzard bearing down on New York City threatened to cut into trading volumes, with thousands of flights already canceled across parts of the East Coast and a state of emergency declared (http://www.marketwatch.com/story/new-york-city-under-state-of-emergency-with-life-threatening-blizzard-set-to-hit-2017-03-14) for the city itself.

The S&P 500 index was down 9 points, or 0.4%, to 2,364, with nearly all nine of the 11 main sectors trading lower. The energy sector led the declines, down 1.6%, while materials shares fell 0.8%.

The Dow Jones Industrial Average declined 39 points, or 0.2% at 20,842, with Caterpillar Inc.(CAT) and Chevron Corp.(CVX) leading losses, down 1.8% and 1.3% respectively.

The Nasdaq Composite Index shed 27 points, or 0.5%, to 5,848. The main indexes are still only a few percentage points below their all-time highs

But some analysts suggested the pullback in the stock market hasn't finished yet.

"Short-term momentum remains weak and short-term oversold conditions are not yet widespread enough to suggest a low is being established," said Katie Stockton, chief technical strategist at BTIG.

On the data front, the National Federation of Independent Business reported early Tuesday that small-business owners' optimism dipped (http://www.marketwatch.com/story/small-business-sentiment-stays-strong-nfib-says-but-slips-in-february-2017-03-14) in February, but stayed close to long-term highs. Separately, producer prices (http://www.marketwatch.com/story/us-wholesale-inflation-rises-again-in-february-ppi-shows-2017-03-14) jumped in February by 0.3%, above consensus expectations of 0.1%, bringing the year-over-year wholesale inflation to 2.2%. Higher inflation is one of the reasons the Federal Reserve is intent in raising interest rates.

The main event, the FOMC meeting, will begin later. The market sees an 93% probability that the Fed will vote for an interest-rate increase, according to data from the CME Group (http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html).

The U.S. central bank's statement and new economic projections won't be released until 2 p.m. Eastern on Wednesday, followed by a news conference hosted by Fed Chairwoman Janet Yellen. The FOMC's policy statement will be examined for signals about the timing and pace of future interest-rate hikes.

Tuesday's blizzard isn't expected to delay the release of the Fed's decision, as a similar storm didn't stop the central bank from meeting in early 2016 (http://www.marketwatch.com/story/blizzard-likely-wont-delay-fed-from-raising-rates-2017-03-13).

Stocks to watch: Energy shares took a hit, following a drop in oil prices. Marathon Oil Corp(MRO) was down nearly 4%. Shares of Transocean Ltd.(RIG) fell 3.2%. The U.S. Oil Fund ETF (USO) opened at 3 1/2-month low, falling for a seventh straight session.

Shares of Valeant Pharmaceuticals International Inc.(VRX.T) tumbled 9.3% after Bill Ackman's Pershing Square Capital Management said it has sold its 10% stake (http://www.marketwatch.com/story/bill-ackman-sells-valeant-stake-to-step-down-from-board-2017-03-13) in the company amid mounting losses. Ackman himself plans to step down from the board.

Over 5,000 flights have been impacted by blizzard conditions on the East Coast (http://www.marketwatch.com/story/over-5000-flights-impacted-by-blizzard-conditions-in-new-york-boston-washington-dc-2017-03-14). American Airlines Group Inc. (AAL), United Airlines (UAL) and Delta Air Lines Inc. (DAL) have all issued travel alerts and began waiving rebooking fees for flights. Shares of airliners was down about 2%.

Yahoo Inc.(YHOO) released details of a $23 million golden parachute (http://www.marketwatch.com/story/yahoos-marissa-mayer-to-get-23-million-severance-package-2017-03-13) for the planned exit of CEO Marissa Mayer after the company sells its core assets to Verizon (VZ). Shares were marginally higher.

Shares of automation software group Synopsys Inc.(SNPS) fell 0.8% after news the company will enter the S&P 500 (http://www.marketwatch.com/story/synopsys-to-be-added-to-sp-500-2017-03-13) after the open of trade on Thursday.

Other markets: Asian stock markets were mixed, while European stocks were lower (http://www.marketwatch.com/story/european-stocks-edge-back-after-4-session-win-streak-2017-03-14).

The pound tapped its lowest levels against the dollar since earlier this year-- (http://www.marketwatch.com/story/uk-pound-slides-to-lowest-in-weeks-after-lawmakers-clear-a-path-for-brexit-2017-03-14)trading around $1.2129 after British lawmakers on Monday passed a law that will allow the Brexit process to begin. The pound also tumbled against the yen and the euro . The dollar was 0.3% higher, while the 10-year Treasury yield (http://www.marketwatch.com/story/treasurys-flat-as-investors-await-fed-outcome-2017-03-14) was flat at 2.61%.

Oil prices tumbled 1.7%, while gold prices were flat.

 

(END) Dow Jones Newswires

March 14, 2017 09:56 ET (13:56 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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